Azerbaijan is located at the intersection of the East-West and North-South transport corridors and has a favorable geostrategic position. For more than a decade, large-scale projects on developing transport infrastructure have been implemented in the country, and large state investments have been made in this field.
The country is emerging as a transport and logistics hub at the crossroad of Eurasia since trade flows increase between Europe and Asia. Azerbaijan is a home for the “Transport Corridor Europe-Caucasus-Asia” TRACECA, the international program on the creation of a transport corridor from Europe to Asia through the Caucasus. The Trans-Caspian East-West Corridor is considered to be the shortest linkage between China and Europe, both in distance and time. The average length of the corridor is 5,400 km, and the possible transit period is 15 days which enables cargo shippers to have 70% time-saving in comparison with traditional ocean shipment.
The North-South international transport corridor is of great political and economic importance, allowing for a significant increase in cargo and passenger transportation. Theoretically, using both corridors Azerbaijan can attract an additional trade volume of almost 230 million tons. According to the Strategic Roadmap for the Development of Logistics and Trade, Azerbaijan will become a strategic international logistics hub by 2025. This will require the attraction of additional investment in transport infrastructure, logistics, and trade.
The Strategic Roadmap breaks down the projected share of Azerbaijan in the international transit of goods by 2020:
Central Asia-Black Sea route – 40%,
Central Asia-Europe route - 25%,
China-Europe route - 3%,
Russia-Iran route - 40%,
Iran-Black Sea route - 25%.
To ensure Azerbaijan can meet this potential as a strategic location, investment has been made to upgrade the transport infrastructure to EU standards and to meet this increasing intercontinental traffic. Significant investment has been made to upgrade the transport infrastructure to EU standards. This includes 10,185 km of constructed and rehabilitated roads and highways; the Baku-Tbilisi-Kars railway line, to connect the Trans-European and Trans-Asian railway networks; the new Baku International Sea Trade Port with a capacity of 10-11.5 mln tons of cargo and 50 thsd TEU (to be increased up to 21-25 mln tons of cargo and 1 mln TEU); the new Heydar Aliyev terminal at Baku International Airport with its state of the art services and significant capacity for transit passengers, as well as the new air cargo terminal. Additionally, Azerbaijan invests in the creation of logistic centers in strategic markets.